By the numbers, there are no signs of Facebook fatigue. The social network's ranks swelled from 100 million in August to 120 million in October. If it sustains that improbable pace, it will encompass the entire world's population by 2012.

There's a threat to Facebook's dominance — and it's not the one you'd think. Privacy is the bugaboo everyone brings up. The company has launched a new program, Facebook Connect, which links other websites into Facebook's News Feed, the site's tattletale compendium of their friends' online activities. Connect, which is profiled in today's Times, is similar in some ways to Beacon, a feature which outraged privacy activists around this time last year when it revealed Facebook users' holiday purchases. But Beacon proved a short-lived Grinch; Facebook rapidly modified the program, and the protests died down.

If anything, the complaint users have about Facebook is not that the site shares their private details, but that their so-called friends do. A surfeit of information has led some to cull their friends' lists on the site. That's more than fine with Facebook CEO Mark Zuckerberg, who has always sought to have his site reflect real-world relationships.

Facebook's trust problem isn't with users; it's with the Web publishers and application developers Facebook executives are trying so desperately to court. And this is a serious problem, because they're the people on which Facebook is trying to build a next-generation advertising business.

By developing Facebook apps — if you've thrown a sheep or been bitten by a zombie on Facebook, you'ved used one of these — or signing up with Connect, these companies are essentially advertising on Facebook. They're just doing it subtly, through the News Feed — and sometimes the advertisement is simply for their own service. The medium is new, but the intent is the same as any other advertiser's: To interrupt users and grab their attention.

Which makes Facebook Connect's lack of progress curious. The company has signed up some minor players — among online-video sites, Hulu but not YouTube; for city guides, CitySearch but not Yelp; the San Francisco Chronicle but not The New York Times; and so on. By far the biggest omission, though, are the makers of Facebook apps.

When Facebook allowed outsiders to write applications for its site last year, companies like Slide, RockYou, iLike, and Flixster eagerly signed up; the largest Facebook-app developers raised hundreds of millions of dollars on the promise that they could piggyback on the Facebook phenomenon. But then came the zombies.

Apps which let you, say, bite your friends and turn them into werewolves provided mindless entertainment to some and annoyance to others proliferated; clever developers figured out ways to get users to spam their friends to get them to sign up for the app, too. The abuses proliferated — and Facebook's growth slowed measurably.

So Facebook cracked down on the application developers — unfairly and arbitrarily, some say. iLike, a music app, and Causes, an app which let users spread the word about do-gooding efforts, got special treatment, while other apps were temporarily removed from Facebook for privacy violations or spam. The image problems got so bad that Facebook, to the derision of many, appointed its top flack, Elliot Schrage, to run its platform efforts.

Those same application developers are now telling anyone who asks to take a wait-and-see attitude with Connect. The main attraction of Connect, as with the application platform before it, is placement in Facebook's News Feed. The lesson developers learned with the Facebook platform is that there are no guarantees of placement, and that the rules change too rapidly to build a solid business on it.

That's why Digg, the popular news-discussion website founded by Web 2.0 playboy Kevin Rose, is rumored to have struck a deal with Facebook that guaranteed a level of News Feed placement before it agreed to sign up with Connect. And app developers are advising other potential Facebook partners to get similar guarantees in writing.

It's a dilemma for Facebook. Zuckerberg has avoided the spam problems that doomed Friendster and hobbled MySpace; by cracking down on app developers, he's kept Facebook appealing to its users. But to keep Facebook independent and turn it into a big business, he'll have to build up a big advertising business. And inserting commercial messages into the News Feed is key to that. It's spam by another name, with an invoice attached.

Zuckerberg may be reluctant to make promises to other Connect partners precisely because his advertising salespeople are hoping to charge them for guaranteed placement. CBS, which is airing this year's Victoria's Secret lingerie show on Wednesday, has signed up with Connect, and the network is paying to make sure that people read on Facebook about their friends' plans to tune in to watch Heidi Klum. That's a harbinger of the future.

The application developers and website operators vying for Facebook users' attention might be relieved if Facebook just started explicitly charging for placement. A rate card would be easier to decipher than Facebook's obscure and constantly shifting antispam rules. But will a deluge of sponsored messages turn off users? There's no easy answer. If there were, Mark Zuckerberg might be more than a paper billionaire by now.

By Facebook's math, one $25,000 grant + one $250,000 grant = a total of $250,000. In announcing the Round I winners, Facebook's Catherine Lee pulled a $225,000 figure out of thin air: "Once round two closes in December, we will announce our five finalists, each of which will receive up to an additional $225,000 in funding." I'm sure Facebook flack Elliot Schrage has some highly entertaining explanation for this which he will deliver straightfaced to other reporters, who will then call us and howl with laughter. For now, we're content to just blame Sheryl Sandberg.

Here's an update for anyone who didn't get the memo: Facebook's applications "platform," a set of software tools for embedding timewasting entertainments within the social network's pages, is not a level playing field. Some applications are more equal than others. That's only become clearer since Facebook foolishly put Facebook's platform in the hands of its top flack, Washington-trained bloviator Elliot Schrage. Facebook's Great Apps program, meant to designate higher-quality applications, has become a shameful excuse for nepotism.

Awarding money on the merits is hard enough. When you mix in the need to help out your COO's brother-in-law's pet startup, or your ex-president's latest venture, it complicates matters. Is Facebook going to come out with a list of apps to fund that it's truly proud of? Or will this look more like an appropriations bill after it's made its way through Congress, larded with earmarks?

The problem is that Mark [Zuckerberg, Facebook founder,] hired Sheryl Sandberg. She has political aspirations as does the head of PR she hired, Elliot Schrage. It's pitiful really: I'm shocked. It used to be full of young, idealistic cool people.

What's so shocking? Given Sandberg's penchant for sharp-elbows politics, honed in the Clinton White House, hiring a conservative lawyer with a close ties to the outgoing Republican administration constitutes a wise ideological hedge, lest Facebook be perceived as too Democratic-leaning. We think our tipster's friend nailed it: It's pitiful that he's shocked.

Anyway, Zuck starts gushing about how great it is Facebook now has 100 million users. I'm thinking, "Yeah, great, we're buying unlimited photo storage for 100 million freeloaders. Have you ever done the bandwidth bill on that, kid?" But he won't shut up. I close my eyes, breathe, put on my happy face, and reply, "Yes, Mark, that's an amazing milestone. We really should celebrate it appropriately. What do you think of Joe putting on a wine-and-cheese reception this evening, like he used to do for me at Google?"

Zuckerberg's face darkens. "No!" he shouts like a toddler. "We're doing a toga party!"

My smile stays pasted on. I calculate the risks.

"Of course, Mark! This is your company. I understand how important the culture is."

I get on the phone to Joe Desimone and tell him — surprise! — we're throwing a party. He can cater for 500 on no notice, right? Mark leads his children's crusade out to the park. I stay behind to rework the Q3 spreadsheets. After he's done cheering them with a megaphone about how they're changing the world, they head straight to the cafeteria building. There's a keg of beer there. No, there are three kegs. No, five.

I can't dodge them anymore, so I walk in and survey the roomful of kids in bedsheets that came from God knows where. They're all 23. They're all dating each other. They're all hopped up on beer and Red Bull that our shareholders paid for. Suddenly, I feel claustrophobic. I can't face these brats. I glide to the bathroom, lock the door, and do the deep-breathing exercises my yoga master Kellison taught me. I steel myself and walk back out. Next thing I know, that joker Dave Morin is wrapping me in a toga. At last, I laugh, while making mental notes about which of these overrated twentysomethings I'm going to fire, in which order.

So Sandberg asked Ling to lie. The fib she demanded: That he was taking a two-month vacation, not returning to Google. In exchange, she'd let him vest his shares in Facebook — a small fortune for less than a year's work. Ling, it seems, declined. His integrity was worth more than whatever Sandberg had to offer.

Technically, Facebook doesn't owe Ling anything. His shares wouldn't vest until he reached his one-year anniversary. But the reality is that Sandberg, by promoting Schrage above Ling, effectively squeezed him out. And Silicon Valley companies often let departing employees keep some of their shares, even if they've been at a company under one year, to keep good relations (and sometimes, buy silence). Facebook has routinely accelerated departing executives' vesting, a maneuver which lets them keep more shares than the calendar would say they've earned.

Sandberg's high-pressure tactic was a foolish overreach. She was trying to manage perceptions, and combat the idea that her version of Facebook is an inhospitable place for brilliant technical talent like Ling.

Instead, she's created an even worse perception — no, rather, a reality. Joining Facebook, always a chancy venture, is more dangerous than ever. Those who take a job there now bear the risk that the manipulations of a power-grasping executive will make all their work worthless. (Poor Mike Schroepfer, who just joined the company as VP of engineering; did he have any idea what he was getting himself into?)

There's another perception that now exists, as a result of Sandberg's actions: That the COO herself is a glib liar, who expects those around her to glibly lie, too. Less than a month on the job, she had underlings fibbing to Fortune for a puff-piece profile.

It seems obvious in retrospect that the paeans that executives like Matt Cohler and Adam D'Angelo offered on the way out must have been fictional, too, bought by Sandberg with Facebook shares. Sandberg's explanation, tossed off with Clintonian brio: "There is no specific underlying story behind the few execs leaving our company." The key word in that sentence is "underlying," minus the "under."

Silicon Valley's corps of engineers have little tolerance for dishonesty. The implicit bargain they strike with the MBAs who turn their work into money: Keep the lies over on your side. Lie to investors, partners, reporters; just don't lie to us. There's no room for lies in the world of code; software works, or it doesn't. That may be a Pollyannaish belief, but it's a common one in the idealism-choked cubicle farms which sprawl along 101.

Sandberg, with her clumsy cajoling, has broken the pact. She tried to turn one of the geeks into a smiling fake, just like her. He didn't bite. One would think that with Sandberg's political training, she'd at least bring the talents of a skilled prevaricator to the Valley. Instead, the Ling affair has revealed her as the worst of both worlds: a clumsy liar.

Palihapitiya, like Ling, has not fared well under the reign of COO Sheryl Sandberg and her right-hand man, Elliot Schrage. Schrage, as a reward for the puff pieces Sandberg's continued to garner from a mostly pliant press corps, has gotten handed most of Facebook's marketing functions. Palihapitiya has been left with a vague "growth" portfolio.

How frustrating this must be for Palihapitiya, who once complained on film about white-male privilege. His employer at the time, the Mayfield Fund, hastened to clarify that his comments were about the world at large, not meritocratic Silicon Valley. But Elliot Schrage, with his two Harvard degrees, is a creature of New York and Washington, D.C., not the Valley. And he has blocked Palihapitiya's rise at Facebook, despite the latter's vastly more impressive tech résumé. Will Palihapitya rest and vest his Facebook shares in silence? Or will he leave, like Ling?

Facebook has been punishing widgetmakers for some time now on its platform, banning them here and there, for the most opaque of reasons. Widgetmakers should probably glad to hear the favoritism is at least codified now, and comes in the form of a carrot, not just a stick. But they aren't that happy. There is resentment among some widgetmakers over the politicking gaining preference on Facebook's platform will now likely require: "[We are] in the business of satisfying users every day, not lobbying for subsidies." No wonder Facebook put Elliot Schrage, a thoroughly political former think-tanker, in charge of the platform.

No wonder. From a Facebook Developers' blog post

Because we want you to follow a more normal sleep schedule than we Facebook engineers swear by, the Hackathon won't last all night long, and instead will be held from 3pm till 11pm.

According to Sarah Lacy's Once You're Lucky, Twice You're Good, those hours means this year's F8 hackathon doesn't deserve the name:

The hackathon is a hallowed tradition at Facebook. It starts when someone in the course of any workday calls for a hackathon. This usually happens about once a month. Anyone except Zuck can call for one. They settle on a night, and over junk food, beer, and Red Bull, Facebook's corps of engineers stays up all night coding. A hackathon has only two rules: the project has to be something cool and it couldn't be something they'd normally work on. Once the sun comes up, they all go to breakfast somwhere together and then they crash the entire next day. All meetings on that day are canceled. [Zuckerberg] knows they could get the same production just working a normal day, and it wouldn't screw up everyone's sleep schedules. But he could never replicate this esprit de corps.

The whole point, in other words, is screwing up people's sleep. But how would you expect an aging flack like Schrage to understand such fine points of hacking?

There may be some wisdom here nonetheless. With animosity brewing between third-party Facebook platform developers and the social network, perhaps trying to create "esprit de corps" between the groups with a groggy all-nighter would have just made things worse. Still, we're sure Zuck is sad to see the F8 hackathon go. The early bedtime means he won't have a chance to replicate last year's "John Hughes moment" with girlfriend Priscilla Chan, also documented by Lacy:

Long after the keynote was done and everyone left was hacking away, Zuck and Priscilla were walking hand in hand, amidst a floor of empty chairs, locked in quiet conversation. The scene was more like a moment from a John Hughes move than the pivotal point that would rock Silicon Valley's startup world. As if they were going to start to slow-dance at any moment.

That Facebook would throw this all in Schrage's lap is telling — about both Facebook and Schrage. Schrage, having shrunk his role considerably by following Sandberg from Google to Facebook, is likely desperate for some scrap of increased authority. And Facebook's geeks, getting assailed in the press for their decisions, are eager for someone slicker than they are to take the abuse.

Still, it needs to be said: Facebook's platform is technically immature, and needs a technical manager. Chamath Palihapitiya, whom Schrage is replacing as its head, may be inept at public relations — look at last year's debacle with Facebook's privacy-invading Beacon feature. But that doesn't mean he's bad at running a computing platform.

Schrage may not be a geek, but he'll now need to play the part. This should be fun to watch. And he can take comfort in one precedent: This isn't the first time the owner of an important computing platform has, in desperation, put a gladhanding slickster in charge. Microsoft's Kevin Johnson, who now oversees Windows, previously ran its sales operations. He also negotiated Microsoft's Facebook investment. He would surely approve.

Schrage, we hear, strongly opposed Simon's hiring as a consultant for the launch of the then-secret Googlephone — the collection of wireless software now known as Android. And Schmidt's extramarital relationships, first with Simon and later with Kate Bohner, were a source of friction between him and Schrage, not because Schrage disapproved, but because it hurt the company's image. Or so I've heard. I've run into Schrage twice at the conference, and he's made noises about talking to me, at which point I'll ask him directly about all this.

That's not the only run-in Schrage and Simon have had, though. Before taking her current gig at Thomson Reuters — one that Thomson Reuters PR staff are not very happy about — Simon made a strong play to take over PR at Facebook. She was not very gently rebuffed, and Schrage landed the job instead.

And yet here we see Schrage, smiling, or faking a smile, as he catches up on email as Simon and Wojcicki catch up. His new bosses at Facebook should be pleased they've hired someone so skilled at putting on appearances.

But Facebook built their social graph on college campuses, and college is where you learn the schoolyard is no place for sharing anymore. At least the company gave a clear reason in language that echoes its official terms of use — unlike eBay's obviously anticompetitive moves to block first PayPal, and (after buying that company), Google Checkout, from leveraging its marketplace.

Is Facebook's move motivated by competitive rivalry? Probably. Can Google complain publicly that it's unfair? Nope. Looks like Facebook's hire of Elliot Schrage is already paying off in terms of dishing Google the company's own PR medicine. Ultimately, while Google's embrace of open standards makes it attractive to developers, users only care about one thing: whether websites work as expected, and don't surprise them by making their data pop up on other sites unawares.

Google does everything it can to coddle its engineers, both financially and physically. By shifting from stock options to restricted shares, it has made their compensation less dependent on the swings of the market, and thus discouraged departures that might otherwise take place.

The management pool at Google is deep indeed, and some find themselves drowning in it. Making a splash is harder and harder, as the company reins in its chaos; to those fighting to get unloved projects launched, a clique close to Larry and Sergey seem to be the only ones at the company who matter.

Human-resources departments pride themselves on minimizing turnover. But Google's "people officers" might want to rethink their approach. A bit of churn could do the company good — from the top of the company on down.

It has nothing to do with Eric's philandering. It has everything to do with the fact that Elliot sucks and is being run out of the company. No idea he has held on so long considering how ineffective he has been. From the inside I can affirm his team hates him. The other executives see him as impotent, reckless, and self-promoting.

It's not the fact that the married Schmidt sleeps around that bothers Schrage (and most of his underlings in Google PR); it's how Schmidt mixes business and pleasure. His recent mistress, Marcy Simon, was temporarily installed in Google's New York office to head up PR for Google's still-nonexistent Googlephone. Simon's replacement, TV journalist Kate Bohner, has squired Schmidt, very publicly, to at least one political debate cosponsored by Google's YouTube and CNN. If Schrage wanted to deal with bimbo eruptions, he could have stayed in politics.

It's not clear Schrage is the best choice for the Facebook job, objectively speaking. One person who's worked with him says he's a disaster as a manager, and not particularly strong in the PR part of his duties, preferring the more high-falutin' policy work.

But that could make him the perfect yes-man to Facebook CEO Mark Zuckerberg's plans for world amelioration. At the South by Southwest conference, Zuckerberg talked, tongue not at all in cheek, about how Facebook could bring peace to the Middle East by preventing Arab teenages from turning into terrorists. He seems to believe sincerely in this stuff. And if it gets him a job at Facebook, Schrage is just slick enough to put on the illustion that he does, too.